Thorstein Veblen Biography Effect Theory

Thorstein Veblen Biography, Veblen Effect

Thorstein Bunde Veblen (1857-1929) is the intellectual father of the branch of American heterodoxy that is often called institutionalism. His scientific and ethical dissent from orthodox theory greatly influenced the development of heterodox thinking in the United States. Veblen's views are in part explained by his background. The son of Norwegian immigrants, he was reared in rural Wisconsin and Minnesota. When he entered Carleton College, his command of English was as deficient as his knowledge of American society, and he never became fully integrated into the American mainstream. He was like a man from Mars observing the absurdities of the economic and social order with satirical wit. At Carleton his brilliance was recognized by J. B. Clark, who was then making seminal contributions to marginal analysis. With Clark's encouragement, Veblen went east to graduate school. He received his Ph.D. in philosophy from Yale but was unable to obtain a job in teaching, apparently because of his atheistic views. So Veblen returned to the farm, married his college sweetheart, and spent seven years reading and thinking.

At the age of thirty-five he secured a postdoctoral fellowship at Cornell. Still unable to find an academic appointment, he received a fellowship to the University of Chicago, where he was finally appointed instructor of economics and given the editorship of the Journal of Political Economy. He was never popular with university administrators, never reached the rank of full professor, and spent the rest of his life moving from college to college. It is not clear whether his failure to receive the professional recognition his scholarship warranted was a result of his penetrating criticism of American capitalism, his almost complete disregard for all but the best of his students, or his personal life, which was complicated by affairs and marital difficulties. In the mid-1920s, however, after several years of political infighting, the American Economic Association offered Veblen its presidency on the condition that he join the association and deliver an address. He refused the offer, asserting that it had not come at the time when he needed it.

Veblen's isolated agrarian upbringing, his training in philosophy, his wide reading in the social sciences, and his deep appreciation of the significance of the Darwinian revolution are reflected in his analysis of American capitalism. His style and choice of words give his works a quality that some writers have found highly entertaining and others have deplored. He was a phrasemaker who loved to make his readers uncomfortable by using terms like conspicuous consumption to describe the purchasing patterns of the emerging affluent society. We are members of either the kept classes or the underlying population. University presidents are captains of erudition, and the chief service of busi-nesspeople is to practice sabotage. Industry is inordinately productive, and profit making requires a conscientious withdrawal of efficiency. Veblen described the church as "an accredited vent for the exudition of effete matter from the cultural organism." W. C. Mitchell has suggested that one needs a sense of humor to appreciate Veblen; perhaps this is why he is so little appreciated by economists.